Category Archives for "Sales"

Jul 11

How much is too much? How to Establish Your Retail Pricing.

By Maria Pesin | Fashion , Sales

 

Establishing your retail pricing effectively is a key part of the retail success of you collection.  So how do you decide what the suggested retails (MSRP – Manufacturers Suggested Retail Price) for your fashion line should be?  This is a question that comes up a lot with my clients.  The answer is not a hard and fast rule.

There are two ways to figure this out. You can multiply your wholesale cost by 2.2 to 2.6. Let’s say you have a t-shirt that your are wholesaling for $10 and you decide to use 2.4 as the markup.  $10 X 2.4 = $24.   Or you can have a percentage calculation also know as an IMU (Initial mark up).   An example would be a dress that wholesales at $75.  that you elect to add a mark up of 60%.  The calculation would be $75 divided by .40 = $187.50.  Here you take the cost complement of 60% which is 40% and divide by the wholesale to come up with the MSRP.

Now that is how you do it, the next question is what should your retail business model be?  Whether you multiply by a fraction number or divide by a percentage the most important things are to look at:

  1. Is there enough margin in there for stores you sell to make money?
  2. Is your pricing competitive?

These days you need to work at more than a double of the wholesale in order for retailers to have a cushion to off set margin erosion.  Margin erosion occurs when a store has to put left-over inventory on sale.  So making sure you have enough margin in there will help make your product more profitable for the stores.  Yet, you must make sure you are  not overpricing your product otherwise it will not sell as well.

Pricing your line is a delicate balance between the two.  Make sure you do your homework and know what comparable product is sold for.  This will help you when pricing your collection.

Jun 08

How Much Inventory Should A New Fashion Brand Carry

By Maria Pesin | Business , Sales

 

How much inventory should a new fashion brand carry?  Well ideally nothing.  However that is not always practical.  When I had my first sales manager position and was responsible for placing production orders I always over ordered.  I remember my first season we had two sweater groups.  Once sold out right away and the other didn’t sell well and I had visions of inventory piling on shelves so high I had nightmares that we would go out of business.  Part of the problem was that styles that originally sold well suddenly dropped dead and no one wanted them anymore.  Yikes!

You would think I learned my lesson.  But in my next job I continued to want to over buy.  Thankfully my boss was more conservative and would challenge me to reduce the orders.  Over the years I learned to balance my desire to sell to  my potential and anticipate needs and be cautious enough to not go overboard.  Of course I was never perfect and that is what off price stores are for.  To sell excess stock.  As long as I didn’t have too much to get rid of at the end of the season my margins were not too impacted.

There isn’t an exact science to buying inventory.  There is no formula.  You have to deal with factory minimums which might cause you to place more than you want to.  If you have a website you will want to have inventory to sell from.  But, when you are  a new brand you have no history to get a sense of what you may need.  The following are what you should think about when opening your line.

  • Not every style sells, so as soon as you get an idea of what customers like guide them into those styles and discourage them from buying what isn’t selling.  This way you build a cutting ticket and don’t have a bunch of little orders.
  • Better to sell out than have to much inventory.  Having to say no to a reorder is a champagne problem.  This way they may buy more up front the next season
  • You may be better served to pay an up charge to buy less units than to have too much.
  • Try to manage your SKU count in the beginning.  Do you really need to offer 7 sizes in the beginning?

I think you pretty much get the message that in the beginning you should err on the side of too little than too much.

Jun 02

4 Direct To Consumer Business Models For Fashion Brands

By Maria Pesin | Fashion , Sales , Vibe Consulting

 

I love the direct to consumer model.  I suggest it to almost all my clients.  The control you have over your presentation is a great reason.  The margins are high.  You can connect with you customer in a more intimate way and create a strong brand experience.  Also you can really get a handle on what your buyer wants, needs, and what they say about your line.  The education is invaluable for making your product even more relevant for your shoppers.  What options can you consider?

  1. Mobile/On Line – Selling through your website is a great way to sell your product.  The cost to set up is relatively inexpensive.  You are open 24/7.  And you can make a website that looks very high end.
  2. Own retail stores – This is a more expensive method.  You have the overhead of the store plus the cost of building the store.  You also have to have enough product to fill the store.  A retail store will give you terrific exposure.  You can design the environment to enhance your product and contribute to the brand story.
  3. Trunk shows/In house parties – This is one of my favorite methods. It involves going to people homes or businesses to present your product.  You can do this one on one or with groups.  I believe that this model will continue to gain momentum. Consumers more and more are gravitating to brands where they have a personal connection.  What can create a more personal experience than having a one on one with your customers in their own settings?
  4. Events/Fairs – This could mean many things.  From street fairs to rock concerts.  Usually you buy a table or booth and sell your wares.  I know a young women who sells her t-shirts at comic-cons.  She rents a table for about $300 and sells on average $5,000 in product.  Of course there are no guarantees your product will generate that much volume but it is another option to consider.

These days it is very difficult to get a store to buy a new brand.  By going direct to consumer you can develop your customer base so that when you are ready to sell to stores you have a history of success you can show the buyers.

May 27

Create Raving Fans For Your Fashion Brand

By Maria Pesin | Fashion , Sales , Vibe Consulting

 

As a brand owner you should always seek to create raving fans for your fashion brand.  A raving fan is someone who is so devoted to your company that they wouldn’t dream of shopping anywhere else and is always sings your praises.

Think about products you love that you would never give up.  Maybe it is the perfect shirt or shoe brand that is your go to.  Don’t you tell all your friends about your wonderful find?   This is the kind of adoration you should work to develop with your customers.

Making a phenomenal product is one part of the equation.  The other part is your customer service.  You can have good customer service, great customer service, or knock your socks off customer service.  A great example of knock your socks off  customer service is the legendary story of a family vacationing at the Ritz-Carlton in Bali.  Because of their son’s food allergies, the family was always careful to bring their own supply of specialized eggs and milk. In this particular instance, however, the food was ruined en route. The Ritz-Carlton manager couldn’t find any of the special items in town, but his executive chef recalled that a store in Singapore sold them. The chef contacted his mother-in-law, who lived there, and had her purchase the items, then fly to Bali (about 2.5 hours) to deliver them. Amazing!  The press on that alone was worth the time and effort and cost.

Are you doing all you can do to create your “raving fans”?

The final secret, according to Ken Blanchard, author who coined the phrase “raving fan”,  is to decide what you can do for the customers, and deliver it, plus 1%. Ask yourself what little extra you could do to give yourself the plus 1%. You don’t need to be 50% better, just 1 little percent makes the difference between a satisfied customer, and a raving fan.

May 25

Why You Should Sell Your Fashion Line From Your Website

By Maria Pesin | Business , Fashion , Sales

 

There are many reasons  why you should sell your fashion line from your website.  Let’s face it on line sales continue to grow at a significant rate.  By having an on line presence you have another avenue in which to sell your product.  Some companies do most of their business on line and have very successful and profitable businesses.  Below are my 5 top reasons.

  1. Your website is a great place for you to create a brand experience.  From the style of your website, to your photography, all the way to customer service you are in control.   You don’t have stores you sell to filtering the experience through the look of their stores and how they take care of their customers.
  2. You can build a direct customer list.  A list is a big asset that an online business will cultivate.  By having a list you can market directly to an audience that has already expressed interest.
  3. The margins are great!  Think about it.  You have to sell online at the same price as the MSRP that you tell the stores you sell.  So you have the margin on the wholesale price plus the margin on the retail price.  Pretty awesome!
  4. You are open 24/7.  This way customers are not locked into shopping when a store is open.  It’s fun to wake up to sales that occur through the night.  These are sales that you might not have had if the consumer had to wait till the morning.
  5. You can create links to your site.  Links are very important to viral marketing. If you have many sites linking to you, it is like spreading the word about your company all around the world. If you have a good website with good products people are more likely to link your website to theirs.  It is a relatively inexpensive way to market your site.

The internet has changed the way we do business.  It has allowed small start ups to get in the game in a relatively small way and build a business before having the big expenses of showroom space and staff.  It should also be an important part of your selling strategy.

 

 

May 16

Are Your Customers Fed Up With Bland, Boring Department Store Assortments?

By Maria Pesin | Business , Fashion , Sales

 

Are your customers fed up with bland, boring department store assortments?

During the first quarter, spending at the nation’s clothing and clothing accessories stores grew 2.7% on a year-over-year basis, reaching $55.4 billion, according to the US Census Bureau. Yet according to Yahoo News , ” The earnings of Nordstrom’s department store peers also declined in 1Q16, primarily due to the impact of weak sales and higher markdowns. The adjusted EPS of Macy’s (M), Kohl’s (KSS), and Dillard’s (DDS) declined by 28.6%, 50.8%, and 18.6%, respectively, in 1Q16.”

So if spending on apparel is up than maybe it is simply that dollars previously accumulated by big name brands usually seen at major department stores are being redirected toward other brands.  Are your customers fed up with bland, boring department store Assortments?  I think so.  Consumers are voting with their wallets.  They are bored with all the big department stores looking the same.  With the same brands, same product, and nothing unique that sets one chain off from another it’s easy to see why department stores are having a tough time of it.

Macy’s is trying to make shopping more fun, but are “selfie walls” and touch-screens gimmicks enough to turn their lackluster business around?

I believe that the stores are forgetting that main rule in fashion and that product is first and foremost.  Buyers no longer scour the market for what is new and fresh.  When I started in this industry a buyer was expected to shop new lines.  Now it seems as though they are discouraged.

In fact when a new brand tries to find out who their buyers is the stores won’t tell them!  It is as though this is a big secret!

You can’t even blame the buyers.  If they try something new and it doesn’t work than they are penalized.  If the brand is small and cannot afford to give the buyer markdown money than they are doubly penalized.

That is why the advent of the internet has changed the way consumers buy.  New fashion companies can now go direct to the customer and bypass the traditional department store route.  So when apparel sales are up and department store sales are down we know that the consumer is finding what they like somewhere else.

 

May 13

Is Your Website Too Confusing!

By Maria Pesin | Business , Fashion , Sales

Is Your Website Too Confusing!  Can someone come to your site and know exactly who you are and what your product is? Do they know where to look? Where to click? What to do? Visual clutter and poor navigation are some of the most serious issues a designer can present to an audience. Not only is the user unlikely to achieve the desired goals (because it’s hidden in the clutter and poor usability), chances are they’ll just leave out of frustration before they do anything.

Yale researchers in partnership with Stanford and University of Michigan scholars, wanted to find out if people were more likely to spend money in response to complicated descriptions or simple ones. As you would guess, the simple options won. If consumers felt that an option was simple or easy, it made them more likely to spend their money.

Your website must have a message so make it very clear to your visitors.  Your customers should not have to guess what it is.   It’s easy to get caught up in adding all kinds of new features and building fancy websites, but sometimes too many bells and whistles can produce a jumbled message to visitors that produces confusion.

One of the biggest error I see fashion brands make is trying to be everything to everyone.  This is true in their collections as well as their websites.  Clarity and focus will go a long way in building your brand experience.  Decide what your brand stands for and make it obvious in your website.

Some websites sacrifice usability for beauty and are difficult to navigate.  The challenge a website designer faces is finding a balance between creating a beautiful site that will attract visitors and one that a customer will easily get them all of the information they came to find.

Creating a stream of business from your website is very profitable so don’t leave the development to chance.  Carefully develop and communicate your concept in a clear manner on your website with clear instructions on where to click to next.

 

 

 

 

May 11

What Can We Learn From Moncler?

By Maria Pesin | Business , Fashion , Sales

What Can We Learn From Moncler?  We  know that the fashion industry is very competitive.  We also know that business in general is tough because we read the news, talk to buyers, and look at our sales.  But, what I always tell my Entrepreneurs is someone is doing business!  Someones business is good.  Why can’t it be yours?

Womens Wear Daily reported yesterday, “Lifted by double-digit growth in Asia and the Americas and a solid performance in Europe and in Italy, Moncler SpA saw revenues grow 18 percent in the first quarter of the year. In the three months ended March 31, sales rose to 237.3 million euros, or $261 million, compared with 201 million euros, or $225.1 million in the same period.”

Now even though Moncler is know as an outerwear brand they grew their business dramatically in the first quarter when sales in coats are typically low.  They have also been growing sales in a commodity that has experienced really poor sales due to the unusual weather patterns world wide.  Wow!

Moncler can attribute their success to many things.  Their styling is amazing.  They have collaborations with world renowned designers such as Sacai, Nicolas Ghesquière  and Thom Browne.  Their photography has been shot by Bruce Weber and Annie Leibovitz.  Their marketing is excellent.  Plus, they are in a category called athleisure which is very hot right now.  While luxury down coats is the new must have, you can say that Moncler has created the category.  Especially since they were one of the first to take down coats to the level of  fashionability that they now possess.

What you can learn from Moncler and any successful fashion business is that you can have a wildly successful fashion brand.  You just need to bring your “A” game to all aspects of your business and leave nothing to chance.

 

May 10

Is Private Label a Good Way to Grow a Fashion Business

By Maria Pesin | Fashion , Sales

 

Private label is when you produce product for a retailer or another brand under their name rather than your own brand name.  Usually the margins on this business are smaller.  But many times the units are bigger than you might have sold the store if you used your own logo.  It is very enticing business, especially if you are new and trying to build sales volume.

It is great for retailers as they expect to pay less for private label so their  profits are much higher. “The stores don’t really make much money off of the brands they carry. For example, a dress from Aqua, Bloomingdales in-house contemporary label, generates much higher profit margins than a number by Marc by Marc Jacobs because they aren’t paying the high premium of getting the Marc by Marc Jacobs label.  Usually the price is less for the customer as well.  This is a win-win for Bloomingdales and their customers.  For brands it extends their product assortment into categories they do not have experience with.

Is private label a good way to grow a fashion business?  That depends on your business.  Each fashion company has its own business model.  It also has its own unique characteristics.  So what might work for one brand might not work for another.  The questions you need to ask yourself are, “What business am I really in? What are my ultimate goals?”  Look at your business as it stands.  Do you need the business because your sales are low or would the sale use up precious resources and reduce your profitability?  Do you have a hot item that would loose its exclusivity if you make it for someone else at a reduced price?  Or is everyone already starting to knock it off so you might as well get a part of that business.  Do you have the infra structure in place to do private label?  Because many companies that do private label have a whole list of requirements in order to do business with them.

As in all business there isn’t one stock answer fits all so studying the opportunity to do private label and making sure it adds positively to your company is truly the way to go.  Always do your due diligence before making any decisions.

 

Apr 25

A Bad Photo Can Kill Sales On Your Website!

By Maria Pesin | Fashion , Sales

I have worked with many catalogs and on line companies.  From Neiman Marcus to Spiegel’s, and I know from experience that a bad photo can kill sales on your website.  Even professional companies that have lots of money to make sure their photography is top notch have times where the picture doesn’t do the product justice.

The following tips will help to insure you do everything possible to make your items look good:

  • Choose a professional model – There is a reason why there are professional models.  They know how to make your fashion item look its best.  You also want to create a look that your customer wants to aspire to.  Using regular people for your shot usually doesn’t elevate your clothing.  But, a great model can make an average item look amazing.
  • Choose a professional photographer – Again there is a reason why you would use one.  They know how to compose a photo to make your clothing and accessories look their best.
  • Use good lighting – Lighting is a key factor in creating a successful image. Lighting determines not only brightness and darkness, but also tone, mood and the atmosphere. Therefore it is necessary to control and manipulate light correctly in order to get the best texture, vibrancy of color and luminosity on your subjects.
  • Make sure your garments fit well and are steamed or pressed –  Allowing the customer to see the shape and natural draping of each product will give them a realistic idea of how the garment will fit on them—not to mention a higher quality shopping experience. Fitting the items can go a long away, too. If your garment seems to be too big for your model, try fitting pinning it and tucking your garment so that it is styled to fit properly. The worst is when a piece is wrinkled.  Making your clothing look its best sounds like a no brainer but you would be surprised at how many times this is overlooked.
  • Make sure your customer can accurately see your merchandise.  If the item gets delivered and it looks different from what the customer expected, you can be sure it will be returned.

Put effort into your photos and try and represent your products in the best and most professional way that you and your budget can put together! Remember you are just not selling fashion you are trying to create desire in your customer.